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Latest Results

2016/17 Half Year Results

22 November 2016

Martin Sutherland, Chief Executive Officer of De La Rue, commented:

“De La Rue’s half year results are in line with our expectations. The Currency business has shown strength and resilience despite the impact from the conclusion of a material contract last year. Both Banknote Print and Banknote Paper have performed well with increased volumes.

“De La Rue continues to make good progress against our 2020 strategic plan. We have further strengthened our position in the fast growing East Africa region through the agreement to form a joint venture with the Government of Kenya. I am also pleased with the progress in Polymer where we have secured a second volume customer. We now supply polymer substrate to 15 issuing authorities, representing c40% of total polymer customers. Although the contribution to the Group from Polymer is still small, we are optimistic about its potential growth in the coming years.

“In non Currency businesses, we have secured two multi-year Identity Solutions contracts and gained early traction in the enterprise market for Product Authentication and Traceability.

“While we expect little impact in the current financial year, as a major UK-based exporter with more than 80% of our revenue from outside the UK, we believe that we would benefit from a sustained weakness of Sterling. We are also encouraged by our 12 month closing order book of £409m and the early strategic momentum in the key future growth areas. We remain confident of the business’ outlook for the rest of the year and beyond.”

CEO Comment

Martin Sutherland, Chief Executive Officer of De La Rue, commented:

“De La Rue’s half year results are in line with our expectations. The Currency business has shown strength and resilience despite the impact from the conclusion of a material contract last year. Both Banknote Print and Banknote Paper have performed well with increased volumes.

“De La Rue continues to make good progress against our 2020 strategic plan. We have further strengthened our position in the fast growing East Africa region through the agreement to form a joint venture with the Government of Kenya. I am also pleased with the progress in Polymer where we have secured a second volume customer. We now supply polymer substrate to 15 issuing authorities, representing c40% of total polymer customers. Although the contribution to the Group from Polymer is still small, we are optimistic about its potential growth in the coming years.

“In non Currency businesses, we have secured two multi-year Identity Solutions contracts and gained early traction in the enterprise market for Product Authentication and Traceability.

“While we expect little impact in the current financial year, as a major UK-based exporter with more than 80% of our revenue from outside the UK, we believe that we would benefit from a sustained weakness of Sterling. We are also encouraged by our 12 month closing order book of £409m and the early strategic momentum in the key future growth areas. We remain confident of the business’ outlook for the rest of the year and beyond.”

FINANCIAL HIGHLIGHTS

  • Half year performance in line with expectations, full year outlook unchanged
  • Year on year revenue flat and underlying operating profit up 2% despite the impact of a c£30m contract which concluded in H2 2015/16
  • Currency revenue down 2%, underlying operating profit up 3%
  • Product Authentication and Traceability revenue up 10% and underlying operating profit up 24%
  • Net debt increased by £9.4m to £115.5m
  • Group 12 month order book remained strong at £409m, providing good visibility for the rest of the year and beyond
  • Concluded pension deficit funding plan with reduced cash contributions in 2017/18 and 2018/19
  • Interim dividend maintained at 8.3p

STRATEGIC AND OPERATIONAL HIGHLIGHTS

Optimise & Flex – on track to deliver operational flexibility and planned cost savings

  • Banknote Print volumes up 22% to 3.3bn notes, reflecting success in winning both overspill and relationship orders
  • Banknote Paper volumes up 8% to 5,300 tonnes
  • Successful launch of new Bank of England £5 polymer notes, designed and printed by De La Rue. Printing of £10 polymer notes underway
  • Agreement to enter 60/40 joint venture with the Government of Kenya, which will strengthen our position in East Africa
  • Restructuring of manufacturing footprint on track

Invest & Build – good momentum building in growth segments

  • Good momentum in Polymer
    • Second significant volume customer win
    • 15 note issuing authorities secured since launch in 2012
  • Holographic foil security feature for polymer launched and issued into circulation on the Gibraltar £100 during H1, further enhancing our polymer offering
  • Active™ - our latest security thread with lenticular technology - in circulation on first note on Bahamas $10
  • Secured two multi-year Identity Solutions contracts with Qatar and Barbados
  • DLR Certify™ track and trace system successfully deployed with Cameroon as the first customer

Headlines

FINANCIAL HIGHLIGHTS

  • Half year performance in line with expectations, full year outlook unchanged
  • Year on year revenue flat and underlying operating profit up 2% despite the impact of a c£30m contract which concluded in H2 2015/16
  • Currency revenue down 2%, underlying operating profit up 3%
  • Product Authentication and Traceability revenue up 10% and underlying operating profit up 24%
  • Net debt increased by £9.4m to £115.5m
  • Group 12 month order book remained strong at £409m, providing good visibility for the rest of the year and beyond
  • Concluded pension deficit funding plan with reduced cash contributions in 2017/18 and 2018/19
  • Interim dividend maintained at 8.3p

STRATEGIC AND OPERATIONAL HIGHLIGHTS

Optimise & Flex – on track to deliver operational flexibility and planned cost savings

  • Banknote Print volumes up 22% to 3.3bn notes, reflecting success in winning both overspill and relationship orders
  • Banknote Paper volumes up 8% to 5,300 tonnes
  • Successful launch of new Bank of England £5 polymer notes, designed and printed by De La Rue. Printing of £10 polymer notes underway
  • Agreement to enter 60/40 joint venture with the Government of Kenya, which will strengthen our position in East Africa
  • Restructuring of manufacturing footprint on track

Invest & Build – good momentum building in growth segments

  • Good momentum in Polymer
    • Second significant volume customer win
    • 15 note issuing authorities secured since launch in 2012
  • Holographic foil security feature for polymer launched and issued into circulation on the Gibraltar £100 during H1, further enhancing our polymer offering
  • Active™ - our latest security thread with lenticular technology - in circulation on first note on Bahamas $10
  • Secured two multi-year Identity Solutions contracts with Qatar and Barbados
  • DLR Certify™ track and trace system successfully deployed with Cameroon as the first customer

The figures below show continuing operations, excluding the Cash Processing Solutions business which was sold on 22 May 2016.

Half Year
2016/17
£m
Half Year
2015/16
£m
Change
%
Revenue 189.5 188.7 0%
Underlying operating profit * 24.0 23.6 2%
Underlying operating margin * 12.7% 12.5% 20bpts
Underlying profit before tax * 18.2 17.6 3%
Reported profit before tax 17.2 25.1 (31%)
Underlying earnings per share ** 14.0p 14.6p (4%)
Reported earnings per share 13.2p 25.0p (47%)
Dividend per share 8.3p 8.3p 0%

* Before net exceptional charge of £1.0m (H1 2015/16: £7.5m income).
** Underlying EPS is calculated before exceptional charge and income, and exceptional tax credits of £0.2m (H1 2015/16: £3.0m).

The Directors are of the opinion that these measures give a better indication of underlying performance.

Key Financials

The figures below show continuing operations, excluding the Cash Processing Solutions business which was sold on 22 May 2016.

Half Year
2016/17
£m
Half Year
2015/16
£m
Change
%
Revenue 189.5 188.7 0%
Underlying operating profit * 24.0 23.6 2%
Underlying operating margin * 12.7% 12.5% 20bpts
Underlying profit before tax * 18.2 17.6 3%
Reported profit before tax 17.2 25.1 (31%)
Underlying earnings per share ** 14.0p 14.6p (4%)
Reported earnings per share 13.2p 25.0p (47%)
Dividend per share 8.3p 8.3p 0%

* Before net exceptional charge of £1.0m (H1 2015/16: £7.5m income).
** Underlying EPS is calculated before exceptional charge and income, and exceptional tax credits of £0.2m (H1 2015/16: £3.0m).

The Directors are of the opinion that these measures give a better indication of underlying performance.

Half year results announcement – 22 November 2016

Half year results presentation – November 2016



   

Annual report 2016

Full year results announcement –
May 2016


   

Full year results presentation –
May 2016

Downloads

Half year results announcement – 22 November 2016

Half year results presentation – November 2016



   

Annual report 2016

Full year results announcement –
May 2016


   

Full year results presentation –
May 2016

De La Rue plc

+44 (0)1256 605000
Lili Huang, Head of Investor Relations

Brunswick (Financial PR)

+44 (0)207 404 5959
Jon Coles
Oliver Hughes